Smucker: Shares Look Fairly Priced as Its No-Moat Portfolio Struggles in Most Product Categories

After updating our forecasts, we trimmed our fair value estimate for Smucker to $140 from $141, which implies a 17 times 2024 adjusted EPS multiple and a 10.5 times enterprise value to 2024 adjusted EBITDA multiple. We forecast sales to decline 11% in 2024 reflecting divestments, growing about 3% per year thereafter. We expect operating margin to recover to 16% by midcycle from about 2% in fiscal 2023 as inflation headwinds subside. Shares trade near our fair value estimate at about $140 per share, so we think investors should wait for a more attractive entry point.